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California man pleads guilty to Bitcoin laundering

A 25-year-old man has admitted to using an unlicensed Bitcoin kiosk to launder money. Federal prosecutors say the Westwood resident exchanged approximately $25 million in U.S. currency and Bitcoin between May 2015 and October 2017. His list of clients is said to have included criminal organizations selling narcotics and other illegal items on what is known as the dark web. The man is expected to make his first court appearance in September in the U.S. District Court for the Central District of California.

The man entered guilty pleas to felony counts of distributing methamphetamine, money laundering, failing to implement an adequate anti-money laundering program and operating an unlicensed money exchange business as part of an agreement negotiated with U.S. attorneys. The man is alleged to have concealed his activities by setting up bank accounts in the name of fake businesses. His customers reportedly exchanged Bitcoin for U.S. currency and vice versa using a kiosk that was not equipped with a camera and did not verify identities.

Federal agents took the man into custody in 2017 after they said he exchanged $400,000 in U.S. currency for Bitcoin during an undercover sting operation. The man also allegedly sold the agent 2 pounds of methamphetamine and admitted that he laundered money for criminals. When the man was apprehended, agents seized $889,000 in U.S. currency and 54.3 Bitcoins. The charges he has pleaded guilty to carry a maximum sentence of life imprisonment.

Cases such as this one are usually settled at the negotiating table. Cases involving white-collar crimes are usually complex and can be expensive to litigate, and U.S. attorneys may offer significant sentence reductions to secure a swift resolution even when law enforcement has provided them with compelling evidence. Criminal defense attorneys with experience in this area might recommend accepting such an offer when the chances of prevailing in court are slim and the maximum penalties are severe.

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